VaBroom – Broom With Built-In Vacuum
DEAL
EPISODE SUMMARY
🕓 Air Date: January 14, 2022
Asking For:
$350,000 for 2,50%
Investor:
Kevin O'Leary
Deal:
$350,000 for 2.5% + $3/unit royalty until $700,000
PRODUCT SUMMARY
VaBroom is a multi-functional cleaning tool that combines the convenience of a broom with the efficiency of a vacuum for quick and effortless floor cleaning.
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Background Story
Trevor Lambert and John Vadnais brought diverse expertise and a shared passion for innovation to the development of VaBroom. Trevor, leveraging his experience in product development, had established a reputable design firm with a track record of successful product launches. On the other hand, John, coming from a lineage of plumbing experts, possessed an inherent talent for practical problem-solving, which proved instrumental in the conceptualization and creation of VaBroom.
Together, they embarked on a journey to simplify the arduous task of everyday cleaning, aiming to revolutionize the way people approached floor maintenance. Their combined investment of $400,000 not only fueled the initial stages of the product’s development but also laid the groundwork for the product’s scalability and market expansion. Their shared vision and complementary skill sets facilitated the evolution of VaBroom from a rudimentary 3D-printed prototype to a fully-fledged retail-ready product.
Driven by a desire to enhance the cleaning experience for consumers, they meticulously honed VaBroom’s design and functionality, ensuring that it seamlessly integrated the efficiency of a vacuum with the convenience of a broom. This collaborative effort reflected their commitment to delivering a practical and accessible solution that resonated with a broad spectrum of users, further solidifying their position as innovators in the household cleaning industry.
The Product
VaBroom, a groundbreaking household cleaning tool, redefines the cleaning experience with its innovative design and functionality. Weighing just over two pounds, it offers a convenient and efficient solution for swift cleanups, eliminating the need for cumbersome dustpans or heavy vacuums. Featuring a pressure-activated nozzle, VaBroom effortlessly tackles debris and dirt with a single sweeping motion, streamlining the cleaning process for users.
Priced at $59.99, the product presents an affordable and lightweight alternative to conventional cleaning tools, delivering exceptional value to customers seeking a hassle-free cleaning solution. Notably, VaBroom has garnered acclaim for its accessibility, catering to the needs of individuals with mobility challenges, enabling them to maintain clean and tidy living spaces without physical strain.
This inclusivity has significantly broadened its appeal, resonating with a diverse customer base seeking practical and user-friendly cleaning tools. VaBroom is readily accessible for purchase through the company’s official website, providing a seamless and direct shopping experience for consumers. Additionally, it is available through select retail partners, ensuring widespread availability and convenience for customers looking to streamline their cleaning routines.
How It Went
The company’s position before Shark Tank
VaBroom has experienced substantial growth, achieving impressive sales of $3.1 million within the last 12 months, and forecasting a projected revenue of $5 million for the current fiscal year. The company’s sales strategy primarily revolves around direct-to-consumer sales, while recently expanding its market presence through strategic retail partnerships, notably including a successful collaboration with major retailer Bed Bath & Beyond.
Benefiting from a well-structured pricing model, VaBroom maintains a profitable margin, with production costs calculated at $17, a wholesale price set at $37, and a retail price of $59.99. This strategic pricing approach ensures a favorable balance between production costs and consumer pricing, contributing to the company’s financial stability and continued growth.
However, the company faces complexities linked to its association with a design firm, which introduces a royalty structure potentially affecting future business operations. While this affiliation adds a layer of complexity to the company’s structure, the visionary leadership of co-founders Trevor and John, supported by the expertise and guidance of investor Kevin O’Leary, positions VaBroom for further expansion and market dominance. With a solid foundation and promising growth trajectory, VaBroom is poised to solidify its position in the competitive cleaning tools market and establish itself as a household name in the industry.
The Negotiations:
During the negotiation phase on Shark Tank, Trevor and John sought an investment of $350,000 in exchange for a 2.5% stake in their company, VaBroom. When Kevin O’Leary expressed interest, he proposed an alternative deal structured around a $3 royalty on VaBroom until he recouped $700,000, combined with a 2.5% share of their design firm. However, the negotiation took an unexpected turn when Kevin offered a substantial investment of $700,000 for a 5% stake in the design firm.
While Trevor and John initially attempted to renegotiate the terms, Kevin held firm, emphasizing the benefits of the agreement for both parties. Despite Trevor and John’s efforts to increase Kevin’s equity share in the design firm to 5%, Kevin stuck to the initial terms, citing the potential for a successful partnership and future collaborative ventures beyond VaBroom.
Ultimately, they agreed on a deal that granted Kevin O’Leary a 2.5% stake in the design firm, ensuring a mutually beneficial partnership that extends beyond the scope of the VaBroom product. This negotiation not only secured crucial investment for the company’s growth but also laid the groundwork for future collaborations and market expansions.
